Area CA 1 of the hippocampus plays a key role in learning and memory. CA 1 pyramidal neurons receive two major input streams, one from the entorhinal cortex that mediates sensory information about the external world, and another from area CA3 that mediates retrieval of previously stored representations. The neuromodulator acetylcholine (ACh) is thought to gate encoding and retrieval. Our preliminary results indicate that ACh, by activating the Ca2+-activated nonspecific cation current ICAN and modulating other ion channels, dramatically affects the intrinsic response to a triangular current ramp simulating the excitatory input, thus levels of ACh may regulate the pattern of place field firing by shifting the peak to later positions in ramp. This shift could cause the coding to shift from prospective, representing upcoming locations, to retrospective, representing recently visited locations, which may favor encoding over retrieval. Our preliminary data also shows that ACh can induce sustained firing; since novelty increases ACh levels, this persistent firing may facilitate the synaptic plasticity required to form new place fields. Moreover, we find that there are both intrinsic and synaptic mechanisms that endow CA 1 pyramidal neurons with low pass filtering capabilities specific to the Schaffer collateral (SC) inputs from CA3, and that these capabilities are switched off by ACh. In Aim 1, we test the hypothesis that cholinergic modulation converts the shape of the rate response to a triangular current ramp from decelerating to accelerating in a dose-dependent fashion, with a concomitant shift in the peak. In Aim 2, we test the hypotheses that intrinsic properties of CA 1 neurons mediate low pass filtering of SC inputs, with a critical additional component provided by parvalbumin-positive (PV+) basket cells, and that cholinergic modulation removes the low pass filtering, such that CA 1 can follow higher input frequencies from CA3. This work seeks to elucidate the neural bases of complex behaviors and mental illnesses. Better understanding of the mechanisms underlying cholinergic modulation of neuronal ensembles may lead not only to an improved understanding of information processing important in learning and memory, but eventually to improved therapies for cognitive disorders.